Can Becker Save the Chicago School?

Has Gary Becker re-discovered what the Chicago School is all about? Here's Becker turning his back on Milton Friedman back in 1976:

I find it difficult to believe that most voters are systematically fooled about the effects of policies like quotas and tariffs that have persisted for a long time. I prefer instead to assume that voters have unbiased expectations, at least of policies that have persisted. They may overestimate the dead weight loss from some policies, and underestimate it from others, but on the average they have a correct perception.

I believe considerations in addition to simple jealousy and envy are behind the opposition of intellectuals to capitalism. A belief in free markets requires confidence in the view that both sides to a trade generally gain from it, that a person's or a company's gain is not usually at the expense of those they trade with, even when everyone is motivated solely by their own selfish interests. This is highly counter-intuitive, which is why great intellectuals like the 16th century French essayist, Marquis de Montaigne, even had a short essay with the revealing title "That the Profit of One Man is the Damage of Another ". It is much easier to believe that governments are more likely than private individuals and enterprises to further the general interest.

One of the explicit ambitions of my book is to put the libertarian intuitions of the old Chicago School on solid foundations - and put the Panglossian political economy of the modern Chicago School into the dustbin of history. I couldn't be happier if Gary Becker himself were willing to lead the charge.

“I would begin by …. by …. really, by being very much embarrassed. For after all, I should not be prime minister if I did not have a majority; I should not have a majority if I did not win it for myself; I should not have won it for myself, at least by honorable means, if I did not govern according to its ideas….. Thus, if I undertook to make my ideas prevail by opposing those of the majority, I should no longer have a majority; and if I did not have a majority, I should no longer be His Majesty’s prime minister.”

Becker's first quote is about voters, who are on the whole not intellectual. I think that this is consistent with the willingness to pay for punishment among lower-corruption cultures. I don't think that modern voters are against capitalism as much as they are not confident that the market can punish bad actors quickly enough and effectively enough. As a group, they are slow to be convinced.

The second quote is about intellectuals, who are very much not representative of voters or of a culture in general.

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